New Chrysler is not so new after all

Dear Mr. Berko: I read your column on the General Motors potential public offering and don’t agree with your conclusion that it will be a bad investment, and I will be buying the stock.

I’d also like to buy some shares of Chrysler when it comes public, too. Can you tell me who owns Chrysler now? And can you tell me when you think it will come public?

Members of my family have, for several generations, been employed by Chrysler, and some still are. I think we must support American business and buy American cars.

I own two Chrysler cars, and I intend to buy some Chrysler stock when it comes out. Thank you. — F.M., Troy, Mich.

Dear F.M.: Chrysler’s ownership is a trail of breadcrumbs.

In l998, Chrysler Corp. and Daimler-Benz merged to form Daimler-Chrysler. Supposedly, the companies would share their engineering expertise and form a “truly” global automobile company. What a joke.

But no matter how much perfume you splash on a pig, a pig will always be a pig. The Chrysler culture could never function under Daimler’s superb management, could never emulate Daimler’s skilled work force and could never produce a Daimler-quality product. That’s not how the American automobile industry comports itself.

And 10 years later in predictable disgust, Daimler sold 80 percent of Chrysler to Cerberus Capital Management in 2007. And the Cerberus idiots hired Robert “Nasty” Nardelli, who couldn’t make it at GE or Home Depot, to run the company.

Nor could he make it at Chrysler, which filed bankruptcy in early 2009. The reorganized Chrysler is now also owned by Fiat (Fix It Again, Tony), the United Automobile Workers (once the most powerful union in the nation) and the U.S. government. And some say that Cerberus and Daimler still have an equity interest.

Sergio Marchionne, who is the CEO of Chrysler/Fiat, has indicated that Chrysler will have an initial public offering probably by the third quarter of 2011. Fiat, which owns 35 percent of Chrysler, plans to split itself into two companies: Fiat Automobile, which includes its car brands plus Chrysler, and Fiat Industrial, which is primarily CNH farm equipment plus its well-regarded Iveco trucks.

However, one must be mad as a hatter to consider owning a single share of this issue (same for the General Motors issue when it comes public again) because good old new Chrysler won’t have changed enough from good old, old Chrysler. Good old new Chrysler will have the same good old, old workers who still smoke pot and drink beer at lunch and don’t give a freckle about quality. Good old new Chrysler will still be held hostage to the United Auto Workers’ self-serving workplace rules and financial shenanigans. And good old new Chrysler will still be managed by the same corrupt culture of fools who drove the good old, old Chrysler into bankruptcy.

The only profits in this IPO will be made by the Wall Street lawyers, CPAs, advisers and brokerage firms who take this public. And considering our high unemployment numbers and lower consumer incomes, I doubt that Chrysler can sell enough vehicles to produce a profit.

However, Chrysler, like GM, will probably run to a premium after the IPO. But I doubt either company will maintain that premium for long, unless the housing market and unemployment show strong gains.